Understanding Decentralization: An Introduction

3년 전

How decentralized are Steem and Steemit? That is the objective of my research. Why do I need to know that? Because I am considering investing more money in steem.


As an investor in cryptocurrencies, I continuously search for the best projects to invest in. And most experts agree that one of the most fundamental characteristics of a successful crypto project is decentralization. So, I had to understand what decentralization is? and then, I will try to determine how decentralized are the crypto projects that I am interested in, starting with steem. I will share my findings with you in short digestible posts.


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Why Did We Have Centralization In The First Place?

To understand decentralization, we need to understand centralization first. So, how did we have centralization in the first place? Some researchers say that man used to have a simple life. A community was so small, less than 100 people. Everyone knew each other and interacted with each other. If someone did something wrong, everyone would know, and they would punish him. Power was distributed among the community members almost evenly.

Then, Came Agriculture...


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When man discovered/invented agriculture, life became more complex. Why? Because people needed to cooperate more. Specialization started to appear. Larger communities started to develop. That caused some new common needs to emerge. People needed someone to:

  • coordinate their efforts,
  • resolve their disputes,
  • protect them from criminals and from attacks, and so on.

To provide for those emerging needs, some central organization(s) was created. Now, we call it the government. As communities developed over time, more common needs came to be, and governments became more sophisticated. The responsibilities of central governments nowadays include:

  • General Education.
  • Law & Order.
  • Security & Protection.
  • Providing welfare.
  • Managing the economy.
  • Protecting the environment.
  • Providing infrastructure services like roads, telephone, and power.

Centralization Was a By-Product

Centralization can be defined as:

the concentration of control of an activity or organization under a single authority.

or

the action or process of bringing activities together in one place.

IMO, this concentration of power, decision-making, control, resources, and activities was never the goal. The real goal was to accommodate those common needs of the society efficiently. Centralization was a by-product.


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A clear example is the military. If everyone was responsible for the protection of himself and his family, we would soon perish. It is much more effective and efficient to combine our forces and resources, and that's how the military is created. The centralization of armed forces is a by-product.

Government Is Not The Only Centralized Entity

As I have mentioned earlier, common needs of the society were the real driving force behind centralization. We needed an entity to provide for those needs. So, we created governments. We thought that was the most efficient way to do it.

However, governments are not the only form of centralization we have nowadays. There are many private organizations that are accommodating common needs of the society in a centralized manner. The following are clear examples:

  • Banks & Financial institutions: Centralizing Finance and Economy.
  • News Agencies, News Networks, and Newspapers: Centralizing News
  • Google: Centralizing Internet Search.
  • Youtube, Facebook, and Twitter: Centralizing Social Media.

And so on...

Centralization Is Not That Bad, Is it?

As you can see, centralization is not that bad after all. Without central governments and organizations, civilization would not be possible. Moreover, we would be less productive and less efficient.


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Then, why are we complaining about it? And why is decentralization hyped this much? What does decentralization mean, really? Does it mean that we dispense with all central entities? What would we do with all those vital functions if we do that? Please tell me what you think in the comments. It will help me with my next posts.


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My biggest problem with centralization is that it is so prone to corruption and manipulation. It's 2018 and the masses are still lulled and brainwashed by propaganda, whether political or economical.

Humans have for thousands of years been conditioned to need someone to look up to and follow.

I dream of a world where people have broken free from these chains, where they wake up to the fact that it's okay to be independent. That they are allowed to think for themselves and become aware that basically every government and corporation are trying their best to mold them into obedient slaves and ultimately, cash cows.

Of course one could never operate a decentralized military, but maybe if people become more self-aware, we wouldn't need so many wars or these ridiculous defense budgets.

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I dream of a world where people have broken free from these chains

That sounds like a nice dream. I think the world is starting to take its first steps towards that.

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It’s a conundrum. Because even in this (steemit) decentralized microcosm we have the need for regulation. People are used to being governed. I recently read a post (link to follow) where there are rules for how to use an upvote bot. Including what is/isn’t acceptable (including type of content, etc). This means that even in here the need to have some type of governance is wanted so that there is some type of order. That sounds like the described centralization above.

I also read another post (link to follow) where the abuse of upvote bots was analyzed. From both perspectives. Stressing on the importance of viewing things diplomatically and from not just your own perspective. If the rules / code of the Steem blockchain allow for someone to take advantage of the system then it techincally by virtue of ability or existence isn’t technically abuse or something that can be considered wrong.

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People are used to being governed

Yep, it's been going on forever and we are primates after all, but we have also now evolved beyond the point where many of our animal instincts are of any use and starting to hold us back. Truly independent individuals are rare.

Besides our tendency to follow the self-appointed alpha of the pack, group or organisation, there is a perverse collective Stockholm Syndrome at play. Humans tend to fall in love with their captors.

As an investor in cryptocurrencies, I continuously search for the best projects to invest in. And most experts agree that one of the most fundamental characteristics of a successful crypto project is decentralization. So, I had to understand what decentralization is? and then, I will try to determine how decentralized are the crypto projects that I am interested in, starting with steem. I will share my findings with you in short digestible posts.

That's a very good idea. I'm in the same position and looking for cryptoinvestments other than BTC. Not that I'm going to sell BTC altogether. It'll remain as my main cryptoinvestment, but I want to diversify a little bit to interesting projects with more upside potential. So, I'm looking forward for your posts!

Then, why are we complaining about it? And why is decentralization hyped this much? What does decentralization mean, really? Does it mean that we dispense with all central entities? What would we do with all those vital functions if we do that? Please tell me what you think in the comments. It will help me with my next posts.

Good question! The problem with centralization is that it puts too much power into the hands of a few. Suppose that only one person operated the Bitcoin blockchain and Bitcoin was the only money in the world.

They could literally do whatever they wanted. They could delete your Bitcoin address and confiscate all of your Bitcoin holdings. Worse than that, they could ban you altogether from their network. That meant you would lose all of your savings and you wouldn't be able to receive money from anyone else.

You would either die or be dependent on someone who had access to that network. This reminds me the times when Google started to randomly ban people from their advertisement network indefinitely. So, centralization? No thanks!

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Thank you, @bbilgin.

I want to diversify a little bit to interesting projects with more upside potential. So, I'm looking forward for your posts!

I hope you would find them useful. I have been investing for 15 years. I have never seen such an opportunity like cryptos. We are lucky to witness the dawn of new world economy.

They could literally do whatever they wanted. They could delete your Bitcoin address and confiscate all of your Bitcoin holdings. Worse than that, they could ban you altogether from their network. That meant you would lose all of your savings and you wouldn't be able to receive money from anyone else.

That sounds like a very bad nightmare. Unfortunately, we are living such a nightmare and we got used to it.

I will try to elaborate more on the problems with centralization in my next post.

great & congenial!

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Thank you, @pwangdu. Glad you liked it.

we do not have any level. @titanik

Nice and helpful post.

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Thank you for your kindness.

Hi @sadekj and Everyone,

Our team, @EOS9CAT came with a very short explanation and hope it would be helpful for everyone here.

Distributed means not all the processing of the transactions are done in the same place. This does not mean that those distributed processors aren't under the control of a single entity. (Think of gas stations, there are Shell stations all over yet all are Shell)

Decentralized means that not one single entity has control over all the processing. By nature, this implies that it is distributed among various parties.

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If you need any other questions, please feel free to send us an email at info@eos9cat.com or visit our website